Termination of Total and Tullow Uganda agreement

Total and Tullow have terminated their January 2017 sale and purchase agreement (SPA) under which Total was to acquire 21.57% out of Tullow’s 33.33% interest in the Lake Albert licences. CNOOC exercised its right to pre-empt 50% of the transaction. As a result, Total and CNOOC would have each increased their interest to 44.1%, while Tullow would have kept 11.8%.

Since 2017, all parties have been actively progressing the SPA. However, despite discussions with the authorities, no agreement on the fiscal treatment of the transaction has been reached and as such, the acquisition agreement has been automatically terminated.

‘Despite the termination of this agreement, Total together with its partners CNOOC and Tullow will continue to focus all its efforts on progressing the development of the Lake Albert oil resources. The project is technically mature and we are committed to continuing to work with the government of Uganda to address the key outstanding issues required to reach an investment decision. A stable and suitable legal and fiscal framework remains a critical requirement for investors,’ comments Arnaud Breuillac, President Exploration & Production of Total.

Total’s interest therefore remains at 33.3% on blocks EA1, EA2 and EA3 prior to the 15% national company back-in, Total being operator of the block EA1 which contains the largest part of the reserves. Total keeps the right to pre-empt any future transactions, in case any party divests part or all its interest.